Impact of COVID-19 on Insurance Companies

Review of an Article
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Review of an Article
In the article, ‘Impact of COVID-19 on Insurance Companies’ published on April 09, 2020, on the EisnerAmper website, Dianne Batistoni and Kenneth Croarkin address the impact of the virus on insurance. Batistoni and Croarkin suggest that the outbreak of the virus has hit the economy of several nations, and they argue that the insurance industry currently faces several hiccups and is at risk of downfall. These authors claim that the responsive actions taken by these companies will significantly determine the future of the insurance industry. Furthermore, they state that the companies depend highly on other firms and markets to accrue their revenue from investment portfolios. The authors write that markets have been profoundly affected due to the pandemic as most industries are slowing down or closing down. Moreover, the authors emphasize the prospective decrease in interest rates from company revenue streams. The authors continue to state that the government policies implemented during this period have affected the insurance industry. Regulations have been introduced to ensure that insurance companies accept late payments due to the state of the economy (Croarkin & Batistoni, 2020). Although the companies continue to compensate their clients, they have been warned against imposing penalties on their clients. Furthermore, Batistoni and Croarkin state that due to the Covid-19 pandemic, actuaries and insurers face a reduction in incomes. The premium payments have reduced since most industries are now resorting to downsizing, and most workers are taking leaves. The authors argue that since most insurance companies do not cover pandemics, they are facing the pressure of compensation of perils under the influence of the pandemic. Batistoni and Croarkin suggest that these companies should gather more information and establish solutions to these challenges. These solutions include obtaining loans and using legal approaches to avoid compensation.
I agree with Batistoni and Croarkin on their forecast of the insurance industry post the pandemic. Insurance companies should formulate plans to tackle the challenges of income and compensation. Pandemics are unprecedented occurrences, and in this case, the effects of Covid-19 could be experienced for a more extended period than expected. Insurance industries should cooperate in developing solutions to the current situation. These companies should consider retaining their clients by keeping in touch with them. For instance, companies could offer care and attention to patients during this period to stay ahead o...